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Rebate u/s 87A on short term capital gains

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archana tanna

33 Points Posted on 21 June 2025

I filed my ITR for FY 23-24 on 24th July. At the time, the tax utility allowed a rebate under Section 87A on Short-Term Capital Gains (STCG). However, today I received a demand notice from the Income Tax Department (ITD) for this. Is there any remedy available?

Replies (3)

Quick Summary

A user filed their Income Tax Return (ITR) for FY 23-24, claiming a rebate under Section 87A on Short-Term Capital Gains (STCG) based on the tax utility. They have now received a demand notice from the Income Tax Department. This occurred because the utility incorrectly allowed the rebate on STCG in the new tax regime, an issue that has since been fixed. While filing a revised return was an option, the deadline has passed, leaving an Updated Return (ITR-U) as a potential, albeit limited, recourse.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 21 June 2025

Unfortunately, there's no remedy available at this point. The demand has been raised due to a defect in the utility that incorrectly allowed the rebate under Section 87A on Short-Term Capital Gains (STCG) in the new tax regime.

This issue was fixed in a newer version of the utility. Given that you've already filed your ITR under the new regime, you can only file a revised return under the new regime, but the last date to file revised returns was January 15, 2025.

Now, your options might be limited to filing an ITR-U (Updated Return), which also defaults to the new tax regime.